Contracting by Negotiation

A recent GAO decision highlights the need for offerors to fully understand a Request for Proposals (RFP) and to pay close attention to the details when preparing a proposal in response to an RFP.  In C. Martin Company, Inc., the agency rejected the protestor’s proposal, determining that it was technically unacceptable.  The agency discovered that the offeror had referenced outdated regulations, standards, and procedures.  Some of the references were to processes and standards that had been obsolete for at least three years.  It became evident that the offeror had incorporated parts of a prior RFP submission years before on a similar project.

The agency’s technical review team concluded that the proposal was deficient and that the offeror did not have a clear understanding of the RFP’s requirements.  The offeror was not given an opportunity to cure the deficiencies. After the offeror learned of the basis of its rejection during a debriefing, it filed a protest contending that the deficiencies in its proposal were minor and that it should have been given the opportunity to correct its proposal. Its main argument was that its proposal could easily have been corrected. 

The GAO, in denying the protest, stated that neither the ease of the corrective effort nor the “minor” nature of the deficiencies were determinative of whether the proposal should be accepted or rejected. Instead, the GAO held that the need for numerous revisions “evidenced an inherent lack of understanding or awareness of the current RFP’s requirements.”    The GAO succinctly stated in upholding the agency’s rejection of the proposal: “Offerors are responsible for submitting an adequately written proposal, and run the risk that their proposals will be evaluated unfavorably where they fail to do so.” Continue Reading It is Dangerous to Take Shortcuts When Preparing Your Proposal

The cover story, “New Marching Orders,” in the most recent edition of Constructor, published by McGraw-Hill Construction, highlights a trend in military construction that should concern small to mid-size general contractors.  In the past, many projects for construction of military housing and other facilities were procured as individual contracts through sealed bid solicitations issued by the U.S. Army Corps of Engineers.  Small and mid-size contractors, familiar with the local market conditions, were well positioned to compete for, win, and perform these contracts.  E. Michael Powers reports that today, however, the Corps is focusing its procurement efforts on multiple-award construction contracts and indefinite delivery/indefinite quantity contracts with task orders.  These contracts tend to be for greater volumes of work, resulting in contracts that exceed the bonding capacity of many small to mid-size firms.

Powers also notes that a contract to build fifty buildings at a cost of $10 million per building, spread across a large geographic area, might not even appeal to firms that have the bonding capacity to bid on such a large contract.  In addition, where so much work is included in one contract, there is only one prime contractor, whereas before there could have been as many as fifty contractors performing fifty separate projects.

These large procurements are often the subject of negotiated procedures under FAR, Part 15, where price is no longer the controlling factor in determining who receives the contract.  In these “best value” procurements, the experience and past performance of a larger contractor may be decisive in the Corps’ award decision.Continue Reading Declining Opportunities for Small and Mid-Sized Federal Construction Contractors

In yet another example of one of my long-standing complaints about the GAO’s interpretation of the “Procurement by Negotiation” process specified in FAR, Part 15, the GAO has reiterated its long-standing policy that “there is generally no obligation that a contracting agency conduct discussions where the RFP specifically instructed offerors of the agency’s intent

“Discussions” in a negotiated procurement between the government and an offeror are the exception, not the norm, as those of you who have submitted a response to a Request for Proposals know.  Too often the government awards a contract on the basis of the initial proposal, without any discussions or negotiations with the offerors.  The reason that the government refrains from formally opening up negotiations is that if discussions occur between the government and one offeror, then the government must hold discussions with all of the offerors in the competitive range.  (FAR 15.306(d)(1).  That can be time consuming.  (It can be argued that the term “Procurement by Negotiation,” as explained in FAR, Part 15, anticipates that discussions and negotiations will actually occur). 

            Of course, not all communications between the government and an offeror constitute “discussions.”   As the Government Accountability Office stated in a recent case, Overlook Systems Technologies, Inc., Nov 28, 2006, “the acid test is whether an offeror has been afforded an opportunity to revise or modify its proposal.” In Overlook, the contracting officer contacted the successful offeror regarding a perceived organizational conflict of interest because Overlook planned to use a subcontractor that had provided a system to the government that Overlook would now “troubleshoot.”  The GAO determined that the contracting officer’s communications with Overlook were similar to the sort of inquiries the government frequently makes to perform a responsibility determination.  The GAO relied heavily on the fact that the government was required to make such a responsibility determination, citing prior GAO decisions that have held that responsibility inquiries are not “discussions.”

           
Continue Reading RFP – There Can Be Communications Without "Discussions"

This article describes a GAO decision that highlights how difficult it is to prevail on a protest that challenges an agency’s rating of a proposal where the protest is not supported by anything more than a difference of opinion as to how much weight, or what score, should be assigned to a particular evaluation factor. Absent a showing that there was no rational basis for an agency’s evaluation, contractors should not expect the GAO to overturn an evaluation.

The GAO published a decision today that was originally issued on July 19, 2006, but delayed in being made public because of the need for redactions.  The case involved a protest by East-West Industries, Inc. against the award of a contract to Regent Manufacturing, Inc.   The solicitation was issued under request for proposals (RFP) No. FA8518-04-R-70801, advertised by the Department of the Air Force for multi-aircraft canopy cranes (MACC). East-West challenged the past performance and risk evaluations of its and Regent’s proposals. The protest was denied.

In its decision, East-West Industries, Inc. , B-297391.2; B-297391.3, the GAO stated that in reviewing a protest of an agency’s proposal evaluation, “our review is confined to determining whether the evaluation was reasonable and consistent with the terms of the solicitation and applicable statutes and regulations.” The GAO found that the evaluation of protester’s proposal under the past performance evaluation factor was unobjectionable where the agency reasonably concluded that only one of four prior contracts was of a magnitude and complexity essentially the same as the solicitation’s, and thus met the solicitation’s definition of very relevant. Since only one contract was rated very relevant and the protester received exceptional performance ratings under only two of its three relevant contracts, the GAO determined that the agency reasonably concluded that East-West’s performance record warranted assigning the firm a very good/significant confidence rating based on there being little doubt–rather than no doubt–as to its successful performance.Continue Reading It is Difficult to Successfully Challenge an Agency's Past Performance and Risk Evaluation

The Navy recently awarded three cost-plus-award-fee, indefinite-delivery/indefinite-quantity (ID/IQ) contracts to Fluor International, Inc., URS-IAP, LLC (a joint venture of URS Corporation and IAP Worldwide Services, Inc.) and Atlantic Contingency Constructors, LLC (a limited liability company managed by The Shaw Group) for global contingency construction. Each contract was for a base year with four one year options, and the value of each contract was approximately one billion dollars. The contractors were to provide construction and related engineering services in response to war fighting needs, global natural disasters, and humanitarian assistance.

The awards were made following a "best value" evaluation based on experience, past performance, contingency planning, management, small business utilization, and cost. Non-cost factors were considered more important than cost. A disappointed offeror, Kellogg Brown & Root Services, Inc. (“KBR”), filed a GAO protest asserting that the Navy misevaluated the proposals under technical and cost factors. The GAO agreed and issued a decision sustaining the protest.Continue Reading GAO Recommends Navy Return To Square One in Award of Billion Dollar Contracts

A GAO decision released today, but dated November 15, 2006, reported that Advanced Federal Services Corp. protested the award of a contract to Eastek, Inc. under request for proposals (RFP) No. W9128Z-06-R-0001, issued by the Department of the Army Communications-Electronics Life Cycle Management Command for business administrative support services (BASS).  The protester contended that

The GAO published a decision today in the Matter of SunEdison, LLC, B-298583; B-298583.2, dated October 30, 2006, involving SunEdison’s protest of an award to PowerLight Corporation under request for proposals (RFP) No. FA4861-06-R-B501, issued by the Department of the Air Force for the construction and operation of a photovoltaic array to supply solar power to Nellis Air Force Base (AFB) in Nevada. The protester contended that the agency’s evaluation of offerors’ prices was flawed and the GAO sustained the protest.

The protester argued that the agency’s evaluation of the offerors’ prices was flawed in that it failed to take into consideration that PowerLight’s price was offered contingent upon “successful completion of an REC purchase agreement with Nevada Power,” whereas its own price was offered on an unconditional basis.  The GAO agreed that the agency’s price evaluation was flawed and found hat PowerLight’s inclusion of a contingency in its pricing rendered the proposal ineligible for award.  Where a solicitation requests offers on a fixed-price basis, an offer that is conditional and not firm cannot be considered for award.  Omega World Travel, Inc.; Sato/Travel, Inc., B-288861.5 et al., Aug. 21, 2002, 2002 CPD para. 149 at 6.  Here, not only did PowerLight make its offer conditional upon successful completion of an REC purchase agreement, but further, it acknowledged the uncertainty of such an agreement being reached.

Government contractors need to keep in mind, when responding to a sealed bid invitation or to a request for proposals, that conditional pricing is an almost certain way to have your bid, or offer, rejected.  Of course, this procurement seems to have been yet another of those all too frequent “negotiated” procurements were actual discussions, or negotiations, did not occur. The Contracting Officer simply furnished each of the offerors with “evaluation notices” describing required information that had not been fully addressed in the proposal or that required clarification.  Apparently the uncertainty in PowerLight’s proposal was not addressed, and there were no discussions during which additional issues could have been raised. (Unlike sealed bidding, where a bid cannot be revised after bid opening, offers submitted in response to a Request for Proposals can be revised after offers are submitted if the government conducts discussions, or negotiations, and gives the offerors in the competitive range an opportunity to submit best and final offers. The regulations regarding Contracting by Negotiation are found in FAR, Part 15).Continue Reading Protest of Agency’s Flawed Evaluation of Awardee’s Conditional Pricing Sustained by the GAO

The GAO issued a decision today reiterating a familiar theme: Where a protester’s proposal failed to provide information specifically requested by the solicitation and necessary for evaluation purposes, the agency’s evaluation of the proposal as “poor” was reasonable.

The solicitation required the submission of a proposal with sections addressing the offeror’s past performance, technical approach